Free services help prevent foreclosures

The earlier action is taken, the more options are available

March 12, 2009|By Alexa Aguilar, SPECIAL TO THE TRIBUNE and Tribune reporter Joel Hood contributed to this report.

Last spring, Michele Tierney knew that finances were getting tight. She and her husband have five children and live in a five-bedroom home in St. Charles. They both work two jobs, but their interest rate was high and a combination of financial and medical issues had made their large payment difficult to meet each month.

For months she reached out to her mortgage company in hopes of renegotiating their high interest rate, to no avail. By the time the company was willing to talk her family's home was in pre-foreclosure.

With the help of the Joseph Corp. in Aurora, she finally was able at the end of last year to negotiate a lower interest rate that put the monthly payment within their reach.

"We are not upper-crust people trying to live a certain lifestyle," Tierney said. "We're just trying to make it."

The numbers show how many families like the Tierneys are in jeopardy of losing their homes: In DuPage County, foreclosure filings leapt from 1,886 in 2006 to 4,470 in 2008 -- a jump of 137 percent. In Will County, the fastest growing county in Illinois during the housing boom, more than 2,000 homes are in foreclosure and thousands more are threatened. Joliet's foreclosure rate of 7.2 percent is the second highest in the Chicago area.

In Kane County, foreclosure filings increased from 1,614 in 2006 to 3,451 in 2008 -- a 114 percent increase -- said the Woodstock Institute, a non-profit that tracks the numbers. These numbers don't account for the families who are barely hanging on to their homes.

For suburban homeowners desperate to hold on, an important first step to avoiding foreclosure may be lining up some help.

There are free local resources available. Non-profit counseling agencies are willing to help homeowners prevent foreclosure by explaining the homeowners' rights, assisting them with the required paperwork and negotiating with the lender.

Two key agencies at work in the south suburbs are the Will County Center for Community Concerns and the Community Service Council of Northern Will County. Both are independent and not-for-profit, subsisting on state and federal grant money, as well as private donations. The Will County Center for Community Concerns based in Joliet provides financial counseling services to struggling homeowners and money to pay delinquent utility bills, repair a furnace or improve a home's insulation. Families whose combined income is less than $27,500 also are eligible for one-time emergency funds of up to $500 to assist with overdue mortgage payments or other household needs.

While there may be no shortage of families who qualify for cash assistance, one hallmark of this housing crisis is that low-income families aren't the only ones suffering, said Bob Kalnicky, executive director of the Community Service Council of Northern Will County, whose clients come from Plainfield, Bolingbrook, Romeoville and Lockport. Kalnicky's agency is smaller than its partner organization in Joliet and provides only financial counseling assistance.

"We have clients coming in with incomes that most people would consider upper-middle class," Kalnicky said. "They're in trouble too. Everyone is hurting."

In 2006, the DuPage Homeownership Center assisted 54 families facing foreclosure. Last year, 272 clients needed help. In the first two months of 2009, the center already has seen 56 families.

In Kane County, Joseph Corp. also has seen a significant increase in families seeking help. When Aurora included information about local foreclosure prevention agencies in residents' water bills, Joseph Corp. saw an immediate uptick in clients, said Denny Wiggins, interim executive director.

Experts agree the key is getting help early. Don't panic or go into denial and throw notices from the bank in a drawer, said Dru Bergman, executive director of the DuPage Homeownership Center.

At the first hint of trouble, homeowners should assemble their paperwork and make an appointment with a local counselor.

A lender is much more willing to work with you when you are behind $3,000 than $30,000, said Jerria Donelson, a counselor at Joseph Corp.

The earlier you take action the more options you have at your disposal, Bergman said.

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Tips to avoid foreclosure

*Don't ignore the problem. The longer you wait, the more likely you will lose your home.

*Get help. Find a local counseling agency approved by the U.S. Department of Housing and Urban Development by calling 800-569-4287. For more information about the Will County Center for Community Concerns, visit wcccc.net or call 815-722-0722. To reach the Community Service Council of Northern Will County, visit thecsc.org or call 815-886-5000.

*Open and respond to mail and phone calls from your lender. They could be calling with information about foreclosure prevention options or pending legal action. Ignoring the problem will not be an excuse in court.

*Prioritize your spending. Cut spending where you can. Delay payments on credit cards and other unsecured debt and put all money toward the mortgage.

*Avoid foreclosure prevention companies. A non-profit agency often can provide the same services for free. The companies may be legitimate but may charge thousands that you should be putting toward your mortgage.

*Don't lose your house to foreclosure scams. Watch out for firms that offer to stop foreclosure immediately. Never sign a legal document without reading and understanding all terms and getting professional advice.